Japan’s Fragile Wealth

Outline

Introduction

A
Fragile Wealth

·Build-up
of Wealth

·Japan
Bashing

·Debt
Problems

Corruption

The
Human Condition

·Quality
of Life

·Search
for Leisure

Conclusion

References

Introduction

At
the end of World War II, Japan’s economy was in a dismal state.During the allied occupation, which
lasted from 1949 to 1952, attempts were made to decrease deflation and improve
the economy.However, a “gift from
the gods” came in 1950 in the form of the Korean War, which jump-started the
Japanese economy.Between 1955 and
1973, the country went through a period of“income doubling,” and then from 1973 to 1990, it went
through a period of “income expanding” (McCormack 2001:xii).Because of this, Japan was both looked
up to and envied by countries around the world.But as the twentieth century came to an end, it became
increasingly apparent that the affluence of Japan was “empty.”Gavan McCormack, a scholar of Japanese
studies at the Australian National University, wrote a book in the 1990s on
this subject.In this book, The
Emptiness of Japanese Affluence, he states that the “prosperous, stable, and
economically triumphant Japan of the 1970s and 1980s rested on foundations as
insecure as those that the earthquake of 1995 brutally exposed in Kobe”
(2001:6).Even though Japan has
rebuilt after the earthquake and continues to prosper, the world has seen that
the country is not as economically strong as once thought.Because the country had worked so hard
to gain economic prosperity, its true wealth in its human, social, and
ecological capital was eroded (McCormack 2001:297).Now that problems in the Japanese economy have been exposed,
the country must find a way both to solve past problems and reform its system
for the future.

A Fragile Wealth

In
1993, Hedrick Smith’s documentary Challenge to America aired on American
television.This film, which
compared Japan, Germany, and the United States, displayed the 1980s mentality
of the Asian model minority.The
language, such as “challenge,” showed how the United States struggled to
compete with the thriving nation of Japan.The Japanese workers were orderly and the children were
perfect.During World War
II, Japan became “the Other” that the United States was out to kill, but after
the war it was elevated to the position of a superior and model country.Japan’s industry and economy appeared
to be flourishing.In April 1995,
Japan was “fabulously wealthy” with a GNP that was more than 80% of that of the
United States (McCormack 2001:7).Japan’s GNP was double that of all other Asian countries combined,
including the Indian subcontinent (McCormack 2001:7).Fifty years after the end of the war, Japan was on track to
become the largest economy in the world (McCormack 2001:7).

Japan
bashing peaked as people became angered at the county’s economic success.In 1982, unemployed workers in Detroit
beat to death a Chinese man, who they mistakenly thought was Japanese (Miyoshi
1991:63).Articles in papers and
magazines discussed the “danger” Japan presented.People stressed the trade imbalance that stood at 50 billion
dollars annually in Japan’s favor and the fact that Japan’s per capita income
was higher than that of the United States.Others complained that one Japanese corporation, Nippon
Telegraph and Telephone, was worth more than IBM, AT&T, General Motors,
General Electric, and Exxon combined (Miyoshi 1991:64).These facts, along with others, brought
out many bashers who openly shared their anxiety and resentment of the
Japanese.In Ishinomori Shotaro’s
manga, Japan Inc., he shows how
the Japanese would like to unify Japan and America for a common good by
creating a Dolen (a cross between the dollar and yen).The United States, however, could never
have accepted this because they saw Japan as a threat.

Although economists knew that Japan’s economic
expansion could not last forever, it continued to mushroom into the early
1990s.However as the last decade
of the 20th century progressed, it became clear that Japan was not
the affluent country so eagerly emulated, or so ruthlessly bashed.The growth of Japan’s GDP has been
illusory because it was far exceeded by debt that must one day be repaid with
interest (McCormack 2001:xiii).In
fact, 16 percent of Japan’s tax revenues went towards paying interest on the
debt (McCormack 2001:39).The
Wall Street Journal calculated that
by 2001, Japan’s national debt would be 36 percent of the total global debt
(McCormack xiii).In 1999, Prime
Minister Obuchi Keizo called himself the “king of the world’s debtors”
(McCormack 2001:xiii).Even in the
1980s, a period of economic growth in Japan, the annual increase in public debt
was larger than the increase in the GDP (McCormack 2001:xiii).Japan’s deflation during the past
decade was unmatched (McCormack 2001:xiii).Between ten and twenty trillion dollars, approximately half
of the global GDP, disappeared from the national assets (McCormack
2001:xiii).In 2000, money had to
be borrowed from future generations in order to balance a budget that continued
to use money for “inefficient, destructive, unnecessary, and often corrupt
public works” (McCormack 2001:xiii).Although Japan has in the past been viewed as the “favored child” of the
West, it is beginning to look more like an orphan, “unsure of its identity,
lacking a sense of direction, drifting, unable to conceive of a goal beyond GDP
expansion, yet increasingly dissatisfied with it” (McCormack 2001:xii).Clearly, the current economic system in
Japan is unsustainable.

Corruption

Corruption
in the government has led to many of Japan’s current problems.In 1993, forty-three percent of the
national budget (31.8 trillion yen) went towards construction (McCormack
2001:33).This is more than the
United States spends on construction, and even more than it spends on defense. This does not result from a need for construction,
but rather a system of corruption sometimes called the doken kokka, or construction state
(McCormack 2001:33).In this
system, the Ministry of Construction gives contracts to firms that belong to
officially recognized cartels, or dango.Because these construction firms are guaranteed regular contracts, they
do not have to worry about competition.The inflated prices from the work allow generous profit margins that go
to maintaining the political system (McCormack 2001:33).In 1993 and 1994, it was learned that 1
percent of all public works contracts of up to two or three billion yen, and
0.5 percent of contracts for sums of more than ten billion yen, had been going
as gifts to politicians (McCormack 2001:34).Because of this corruption, it costs 9 times as much in
Japan to build a road as it does in the United States (McCormack 2001:35).In order to fund this corrupt system,
the Japanese tax-paying citizens have become innocent victims of high-level
extortion as money is taken to fund these projects, leaving Japan in debt to
its own citizens.Besides funding
corruption, many projects have been carried out that were both unneeded and
damaging to the environment.For
example, Japan decided to build dams to strengthen urban industry (McCormack
2001:45).A large amount of money
was put into the project, but the dams ended up useless, clogged, and hazardous
to the environment.Because of
these mistakes made in the past, it will take additional money to remove or
repair these dams and to improve the environment.Japan has struggled so much to prosper economically, that it
has often not considered affects on the environment, one of its most precious
resources.

The Human Condition

Japan
has also forgotten its people, another important resource.Even with the seemingly higher per
capita income in the early 1990s, Japan’s quality of life was generally far
poorer than that of most people in the United States (Miyoshi 2001:65).Japan’s housing situation is worse than
in several developing nations, it has the greatest proportion of unpaved roads
among the industrialized nations, and there are few parks and other public
facilities(Miyoshi 1991:65).Even though the country is generally
prosperous, the vital areas of cultural life are sorely deficient (Miyoshi
1991:65).Thus, besides the
so-called “emptiness” in material affluence (mono no yutaka), emptiness also exists
in the spiritual affluence (kokoro no yutaka).McCormack says that in no other country
is the “social life so structured around the imperatives of economic life”
(2001:289).Approximately 10,000
people die every year from overwork, or karoshi (McCormack 2001:85).The social organization of labor in
Japan is generally stressful, requiring 200 to 500 more hours of work than in
other industrialized nations (McCormack 2001:80).The current system of lifetime employment does not work for
many females as they are pressured to leave the workforce in their mid-twenties
to marry and have children, only returning to the workforce after their
children are older (Brinton 1993:28).This creates an M-shaped diagram of female labor force participation
rates, while other countries have a simple arc because females work throughout
their twenties and thirties.The
pressure of having to leave the workforce or not being offered the same job as
a male causes many young women to leave the country to study and work,
resulting in brain drain.

Because of the incredible stress of
work, a new leisure industry was born in Japan.In 1992, the nation became known as the “livelihood
superpower,” as the country put much money into finding ways to relax
(McCormack 2001:78).Golf courses,
amusement parks, and meditation chambers opened across the country.But still, the purpose was to make
money.Economism, or the
belief that economics is the most important element in a society, came out of
Japan’s need to develop the country and improve technology after the end of
WWII (Sugita 2001:86).Social and
cultural values were pushed to the back as “consumer euphoria and urban
workaholism” came to the front (Sugita 2001:87).Japan had to work to redevelop both its identity and
rejuvenate its economy.

Conclusion

After the
end of World War II, Japan worked at modernizing and gaining equality with the
West.They reached this point,
managing to both influence and frighten Americans.While some companies in the United States chose to follow
such Japanese examples as emphasizing group effort over individuality, others
were angered.But in Japan, even
though they were experiencing continuing economic growth, people were
dissatisfied.While some countries
try to replicate Japan’s economic model, its affluence is problematic. Japan
has exploited its natural and human resources carelessly in order to achieve
its goals.McCormack suggests that
Japan should try to become a “zero-growth state” (McCormack 2001:293).He quotes John Stuart Mill as saying,
“It is only in the backward countries of the world that increased production is
still an important object:in
those most advanced, what is economically needed is a better distribution”
(2001:293).Japan certainly has
many economic problems, but by recognizing and addressing these issues, the
country should be able to resolve many of its problems.

References

Brinton, Mary C., Women
and the Economic Miracle:Gender
and Work in Postwar Japan.University of
California Press, 1993.24-70.